China is the EU’s second-largest trading partner for goods after the US, with bilateral goods trade accomplishing €732 billion (£633 billion) in 2024. Chemicals make up almost 10% of goods imported into the EU from China, and China’s share of total chemical imports into the EU has doubled from 9% to 18% between 2014 and 2024.
Europe’s trade relationship with China is therefore each highly vital and politically influential. Currently, the EU has taken a globalist outlook and been relatively accepting of cheap chemical imports. Moreover, that outlook is now transforming – both due to a preference to distance the bloc politically from a considerable ally of Russia, and because of an increasingly protectionist trade policies from the US and elsewhere.
In pharmaceuticals, the EU is preparing to implement a Critical Medicines Act, to incentivize EU-based production of essential medicines and their active ingredients– many of which are recently sourced from China or India.
There are reports of discussions around similar policies for chemicals, which might need companies to diversify their supply chains and source materials from a couple of suppliers in different nations. As yet there are no formal proposals, and experts consulted by Chemistry World emphasize the vast bureaucratic pressure that would be concerned in enforcing such a system.
European chemicals production has, for numerous years, been under considerable pressure from sustained high energy and feedstock prices within the wake of conflicts in Ukraine and the Middle East. Meanwhile, China has subsidized a fast enlargement of its domestic chemicals industry in a effort to become self-sufficient, where formerly it was a considerable chemicals importer. The resulting oversupply of cheap imports to the bloc has kept prices low, forcing European companies to soak up their increasing costs and watch their margins erode.
Moreover, those discussions – mixed with an apparent reinforcing of the EU authorities’ response to complaints around economic dumping of cheap imports – suggest a greater willingness to intrude in industrial policy. Political reputation of the strategic significance of domestic chemicals production, and the need for a degree of support and protection, will be welcomed.
